Computer Simulation Models for Profit Maximisation in a Paint Production Company

Tobinson Briggs and Shadrack Mathew Uzoma
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Tobinson Briggs: University of Port Harcourt, Port Harcourt, Nigeria
Shadrack Mathew Uzoma: University of Port Harcourt, Port Harcourt, Nigeria

European Journal of Engineering and Technology Research, 2020, vol. 5, issue 1, 8-11

Abstract: Paint manufacturing is an advanced area of technology in the world. Necessarily paints are applied to any structure or body for a virtuous number of reasons : corrosion protection, aesthetic features to create attractive colours on buildings to protect it from environmental degradation and none the less to protect the bodies of automobiles, aircraft, and ships from ecological damage; also to give the right shades of colours catching to the eyes and minds of customers. In this research work, mathematical models developed by the researchers were employed to maximise the profit margin of a painting Company. The mathematical optimisation models are Linear Programming production demand-based planning models. It is geared towards maximising the profit of the establishment subject to a certain number of critical constraints. Lindo computer software was employed in the simulation to access the profitability index of the company subject to demand constraints. Revenue accruable from sales of the items produced was ten million and six hundred and twenty-seven thousand sixty-two naira and fifty-three kobo (N10, 627,062.53). The different cost inputs resulted in the expenditure of ten million and six hundred and ten thousand and six forty naira (N10, 610,640.00). The profit margin is sixteen thousand four hundred and twenty-two naira and fifty-three kobo (N16,422.53). Profit optimisation maximisation procedure using Lindo Computer Software resulted in a profit margin of twenty-nine thousand one hundred and ten naira (N29,100.00). The percentage difference in profit margin is 77.26%. The simulation profit optimisation results revealed a tremendous difference in turnover margin and called for an interaction with the Academy Color Paint Company for enhancement in the turnover margin of their establishment.

Keywords: Paint Manufacturing; Planning Models; Profit Margin; Linear Programming; Maximizing Profit; Simulation (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:epw:ejeng0:v:5:y:2020:i:1:id:61679

DOI: 10.24018/ejeng.2020.5.1.1679

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